Mobile Payments In Space? Get It Right On Earth, First

PayPal wants to support space tourists' mobile transactions, but speakers at the recent Mobile Commerce World suggested that businesses have much to learn about building a great mobile commerce experience.

"If you bring your phone, what network do you connect to? Which mobile carry will bring mobile payments to space and how? A lot of these questions need to be answered and that's why we are doing this … You're in the space hotel three years from now and you want to buy your morning coffee. What government is going to regulate that purchase?"

I assume Marcus asked these questions with a straight face, and can only imagine that Yoda is rolling in his galactic grave at the thought of a bunch of entitled-feeling travelers roaming space looking for a Starbucks and complaining about cellphone reception.

Closer to earth and reality, there is still much to be done in order for mobile commerce and payments to overcome current barriers to adoption and realize their potential as a transformative business model. And as with so much around new ways of doing things, the challenges are less around the technology itself and more about education, attitudes and business strategies. Those were my take-aways from this week's inaugural Mobile Commerce World in San Francisco. Produced by UBM Tech, which also is the parent company of Bank Systems & Technology, Mobile Commerce World's theme was "Enterprise Strategies for Driving Mobile Revenues." The event was heavily focused on the ways mobile commerce if transforming retailing, but issues around mobile payments were very much on the agenda.

But while banks weren't the primary target audience at Mobile Commerce World, there were plenty of insights about customer engagement and utility that banks should heed as they build out their own mobile banking and mobile payments strategies.

For example, lack of adoption of mobile wallets stems in part from an incomplete understanding of why consumers might want to use a digital wallet in the first place, according to the panelists at a session I moderated about potential winners and losers in the mobile wallets space. "What do consumers need right now?" asked Bill Ready, CEO of Braintree. "Consumers adopt new products slowly, but they adopt solutions to pain points very quickly. What is the pain point to be solved by a mobile wallet?" Aite Group senior analyst Arkady Fridman countered by asking, "Does it really need to be a problem, or can it just improve the experience?" Both experts concurred that current mobile wallets players, whether banks, tech companies or retailers, were more focused on defending their pieces of the mobile commerce turf than addressing consumer pain points.

Decisions about platforms and development principles should be driven by the fact that "The best experience will always win," according to Roger Andelin, President, CTO, Rakuten.com Shopping (formerly Buy.com). Companies and developers have to consider "what is the best design that will meet your customers' requirements?"

Andelin advised businesses that the wrong way to build a mobile experience is to plan, fund and develop to a set specification. "Instead, invest in a team with a set burn rate" and let them iterate and improve the apps. "Software is not born perfect – it's like a child and requires a lot of investment and guidance," he said. "Think of your investment as an ongoing iterative investment of improvement. Software has to be funded in a way that will allow the team to evolve it. This approach is much more conducive to success."

While a strong project manager is essential to a mobile app development initiative, Andelin added, don't make the mistake of letting the project manager actually run the project. "You need someone who will track, not just the features, but the business value of the app. That should be the number-one priority. You can deliver the specified features and it can still be a disaster," he noted.

Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio

Hmm, the extent of first world problems can be astounding. While David Marcus worries about who will front the bill for my Space espresso, I'm still on Earth wondering if it's worthwhile to set up Square on my mobileGǪ (Nope)

More to the point, on a recent trip to a city in Spain I had a difficult time finding business willing to swipe a major credit card. I can only imagine the raised eyebrows if I handed over my phone as payment. Sorry David, the industry must learn to walk before it can run.

The risk, as they suggested, is that in the effort to protect turf they will let other more aggressive players swoop in and gain the competitive advantage. They are thinking more about "what's in it for me" near/long term and not enough about "what's a good mobile commerce experience, what kinds of functionality and experience do consumers really want [if any]?"

I think in a lot of cases these mobile players just want to collect and control as much consumer data as possible. Carve out their "turf" as the panelists you mention said. They could find lots of ways to capitalize on that data down the road but nobody's figured out a way to get there.